According to the bureau, the drop was the first month-on-month headline inflation decline since February 2018.
Consumers had also to endure an increase in food and non-alcoholic drink prices, which rose by 2.3 percent.
Nigeria's inflation fell from 11.23 to 11.14% for the month of July, statistics released by the National Bureau of Statistics (NBS) on Wednesday showed.
As for year-on-year comparison, retail inflation had increased by 2.36 percent in July last year.
Meanwhile the Retail Prices Index (RPI) measure of inflation fell to 3.2%.
On a month-on-month basis, July food inflation was highest in Kwara (4.57%), Kaduna (3.99%) and Imo (3.44%), while Ogun (0.16%) and Osun (0.38%) recorded the slowest rise.
Mike Hardie, head of inflation at the ONS, said: 'Transport tickets and fuel, along with often erratic computer game prices, drove up costs for consumers.
The cost of raw materials for manufacturers was 10.9 percent higher, the biggest annual rise in over a year, reflecting an increase of more than 50 percent in oil prices.
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"These figures show that the cost of living squeeze is not yet a thing of the past", Tej Parikh, a senior economist at business lobbyist the Institute of Directors said in an email. "This is likely to weigh down consumer spending, posing fresh problems for embattled high street businesses", he said.
The price of a typical United Kingdom house is now around £228,400, a £1,000 increase on the previous month.
The rise in global fuel prices has led to a continuous increase in inflation in the fuel and light segment, Mr. Pant added.
John Hawksworth, chief economist at PwC, said real household income growth will remain "subdued" over the next year. The measure excludes 5% of the highest and lowest price changes.
On a seasonally adjusted basis, average house prices in the United Kingdom were unchanged between May 2018 and June 2018, compared with an increase of 0.5 per cent in average prices during the same period a year earlier.
Prices for clothes were down by as much as 3.7pc month on month.
Annual house price growth across the country slowed to its lowest level in almost five years in June, ONS figures also showed.
"Based on this analysis, CPI inflation is set to return to the 2% target over the year ahead".